Bank of America, N.A. v. Caulkett; United States Supreme Court Ruling Protects Junior Liens

CHICAGO, June 3, 2015 /PRNewswire/ -- On June 1, 2015, the United States Supreme Court in Bank of America, N.A. v. Caulkett unanimously ruled that underwater junior liens cannot be stripped-off or removed in a chapter 7 case, securing the rights of financial institutions to recover money if a property retained by the debtor goes up in value in the future. This is a victory for secured lenders, but will help lenders take more risks, making credit more readily available to those who may need it most.

Earlier this year, SmithAmundsen filed a friend-of-the-court amicus brief on behalf of the Community Bankers Association of Illinois in the matter. Significantly, the court based its decision, in part, on an argument contained in the brief. SmithAmundsen partner John Collen was Counsel of Record on the brief with partners Michael Cortina and William Hackney acting as Of Counsel.

Community Bankers Association of Illinois President Bob Wingert and General Counsel Jerry Cavanaugh provided the following statement: "The Community Bankers Association of Illinois ("CBAI") is thrilled with the U.S. Supreme Court's June 1 decision resolving the case of Bank of America, N.A. v. Caulkett and with the efforts of CBAI Associate Member law firm SmithAmundsen LLC in preparing an amicus brief on behalf of CBAI and CBAI's members throughout Illinois.  The victory in this decision protects the secured interests of junior lienholders in bankruptcy cases, and CBAI believes that the arguments submitted in the amicus brief were reflected in the Court's opinion.   A big "thank you" to SmithAmundsen LLC, including Michael Cortina and John Collen, who guided CBAI through the amicus drafting and kept CBAI apprised of the status of the case.  The Caulkett decision is a big victory for junior lienholders."

ABOUT SMITHAMUNDSEN:  SmithAmundsen is a law firm of over 150 attorneys practicing in Chicago, St. Charles, Rockford and Woodstock, IL; Indianapolis, IN; St. Louis, MO; and Milwaukee, WI. The firm handles the transactional, labor and employment and litigation needs of companies across the U.S.  For more information, visit: www.salawus.com.  Connect with @SmithAmundsen on Twitter or on LinkedIn at www.linkedin.com/company/smithamundsen-llc.

ABOUT COMMUNITY BANKERS ASSOCIATION OF ILLINOIS: The Community Bankers Association of Illinois is the state's only true advocate of community banking. Formed in 1974, CBAI proudly represents approximately 400 Illinois financial institutions and 150 associate members. For more information, visit: www.cbai.com.

SOURCE SmithAmundsen LLC

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